MR. McCLELLAN: Good afternoon. I want to begin with one
announcement. This is an update to the President's schedule. The
President looks forward to hosting Mexican President Vicente Fox and
Canadian Prime Minister Paul Martin in Texas on March 23rd. The three
leaders will discuss ways to strengthen our continent's common
security, and enhance our people's common prosperity. This meeting will
consist of working sessions at Baylor University, and a lunch hosted by
the President at his ranch in Crawford.

And with that, I am glad to take your questions.

Q Scott, what's the President's position on a consumption tax to
replace the current income tax code?

MR. McCLELLAN: Well, as you're aware, the President appointed a
bipartisan advisory panel headed by former Senators Breaux and Mack to
look at the tax code and recommend some ways to reform it. The
President laid out some very clear principles for moving forward on tax
reform. He wants to make sure that the tax code is simpler and fairer
and that it encourages economic growth.

And so that's the principles that the President charged the
advisory panel to build upon. And we don't want to prejudge the outcome
of their recommendations. They'll make recommendations to the Treasury
Secretary, and then the Treasury Secretary will report back to the
President, so that we can move forward on reforming our tax code. Our
tax code is a complicated mess. Many Americans, today, right now, are
trying to shift [sic] through the many pages in their tax filings as
they work to meet the April 15th deadline for paying their taxes. And I
think they understand how complicated and burdensome the tax code is,
and why we need reform.

And so that's the spirit in which the President is working. We
appreciate Chairman Greenspan's comments today, saying that it does
need to be reformed. He expressed some ideas, and we certainly look
forward to hearing from the bipartisan advisory panel when it reports
later this summer -- no later than later this summer.

Q One of the ideas that he talked about today was consumption tax.
Does the President believe that a consumption tax would satisfy his
principles of being simpler, fairer, and encouraging economic growth?

MR. McCLELLAN: Maybe you didn't hear me a second ago, John. We want
to let the tax reform panel do its work, and we don't want to prejudge
the outcome of that. The President laid out some pretty clear
principles. But they'll be looking at all issues when it comes to
reforming the tax code, and we welcome their ideas and input.

Q Well, there does seem to be an idea floating around -- Greenspan
talked about it today, John Breaux has talked about it in the past --
sort of a combination of income tax and consumption tax. Would that
satisfy the simplifying part of the President's principles? I mean, it
seems like it might make it more complicated if you said, certain
amount of income tax, certain amount of consumption tax; taking the tax
off of certain goods that are consumed mostly by the poor. I mean, that
sounds like it becomes more byzantine, rather than less.

MR. McCLELLAN: Well, we'll try to get you time at the next
bipartisan advisory panel meeting, so you can express some of your
opinions for moving forward. I'm sure they would welcome them.

Go ahead, Steve.

Q That wasn't an opinion, that was reflecting what people have
said.

Q Senator Grassley says he would like to focus the Social Security
debate on the solvency of the system. How do you respond to him? And
are private accounts in danger?

MR. McCLELLAN: We share that. The President has made it very clear
that we need to make Social Security permanently sound. That's what
he's talking about. And as we move forward to save and strengthen
Social Security, he believes personal accounts are an important part of
any comprehensive solution. The President has clearly outlined his
principles for strengthening Social Security. We know that the current
system is unsustainable. It faces an unfunded liability of more than
$10 trillion, and that is why we need to act now so that we don't pass
on this unfunded liability to our children and grandchildren.

By 2018 you're going to see that the system is into shortfalls.
It's going to be paying out more than it's taking in. And that's
because of the demographic facts that we face in this day and age. You
have fewer number of workers paying into the system to support a
growing number of retirees. And as Chairman Greenspan testified
yesterday, the problem really begins to hit in 2008. That's when the
first baby boomers start to retire, and that will increase the numbers
of those who will be receiving retirement benefits. That's why we need
to act now to strengthen Social Security.

And the President believes that as part of comprehensive reform, we
need to include personal accounts, so that younger Americans can have
the option of realizing a rate of return that is closer to what is
being promised, because right now the promised benefits of the future
are an empty promise. They will not be there under the current
system.

Q So he disagrees with Senator Grassley, who says, set aside the
personal accounts, let's work on the solvency alone?

MR. McCLELLAN: The President appreciates all those who are coming
forward with ideas for solving the problem facing Social Security. We
see in poll after poll that the American people recognize there are
serious problems facing Social Security, and they recognize that those
problems only are going to get worse over the coming years. That's why
the President believes now is the time to act.

But the fact that people are talking about ways to solve this is
very helpful to moving forward on a solution and getting something done
this year. The first thing we have to do is have a common understanding
of the problems facing Social Security. And we know that the financial
problem facing Social Security is at the core of what we need to
address. We also know that under the current system, our children and
grandchildren are not going to be able to realize the benefits that
they're promised. That's why the President wants to add a new benefit,
give people ownership over their own retirement savings and help them
realize a greater rate of return on their own money.

Q So the President is listening to all these ideas, but as he
listens, does he hear this nervousness, at the least, among
Republicans? You have Senator Frist originally saying maybe it doesn't
get done this year. Now he's backtracked, apparently, after a little
advice from the White House. Senator Grassley saying --

MR. McCLELLAN: Let's be fair. I think it was -- he was selectively
quoted. And he feels he was taken out of context, obviously.

Q Fair enough, all right. So you have Senator Grassley now saying
let's set aside the President's main priority, personal savings
accounts, instead focus on the solvency. And you have Senator Hagel,
who is going to be out there proposing his own plan. What's going on?

MR. McCLELLAN: And just think, a few weeks ago, many people were
denying that there was even a problem. Now everybody is talking about
solutions. That's a positive sign. And this ball game is just getting
underway. We haven't even had our chance to go to bat and step up to
the plate. But the President is going to be going all across this
country, reaching out to the American people and engaging them in this
national discussion, because the American people, when they see
problems, expect us to do something about it. And that's what the
President is doing. He's leading on this issue, and saying, this is a
serious problem; it only gets worse with time, that's why we need to
act now.

And the first step is going to be to clearly define the problems
facing Social Security. We're still in that phase right now. And then
we can talk in more detail about possible solutions. But the President
wants to move forward in a bipartisan way. That's why he welcomes all
those who are expressing ideas for solving the problem because they
recognize that it does face serious problems, and that we do need to
act to address it. And that's a helpful sign to making progress on this
important priority.

Q So it's the top of the first inning and you're the home team,
right?

MR. McCLELLAN: No. (Laughter.)

Q Scott, there's a report out of Vienna --

MR. McCLELLAN: If only I could get you to report it that way.
(Laughter.)

Q There's a report today out of Vienna, the IAEA, that Iran has
built -- is building fortified tunnels a half-a-mile under the ground
to hide nuclear materials in case of a possible air strike. Is this
some new information to the administration? Does this raise new
concerns?

MR. McCLELLAN: We continue to have serious concerns about Iran's
interest in developing nuclear weapons. We have long expressed our
concerns that they are pursuing nuclear weapons under the cover of a
civilian nuclear program. The IAEA and all the members of the Atomic
Energy Agency sent a very clear message to Iran. They need to fully
comply with their international obligations, they need to come clean,
they need to be fully open, they need to be fully transparent and they
need to cooperate fully with the inspectors. That's what we expect.
That's the way that Iran can realize better relations with the
international community.

Q Do they need to close the tunnels, or stop building them?

MR. McCLELLAN: What they need to do is come clean and fully comply
with their international obligations. That's what we expect. We're
continuing to discuss a common strategy for achieving our common
purpose, which is making sure Iran does not acquire nuclear weapons,
and we're doing that with our European friends.

All of the international community is sending a clear, unified
message to the regime in Iran and it is, abide by your international
obligations, don't develop a nuclear weapon. And the way to show that
-- show confidence with the international community that they have no
intention of developing a nuclear weapon is for Iran to fully stop all
their enrichment reprocessing, enrichment and reprocessing activities.
That's the way -- we want a permanent cessation to those activities.
That's the way for them to build confidence with the international
community.

But this -- what has been stated in Vienna continues to raise
concerns about Iran's behaviors -- behavior and their intentions, and
that's why we are working with our European friends to resolve this
matter in a diplomatic way. But, ultimately, it's going to depend on
Iran. Iran has got to make the decision to change its behavior and
abandon its pursuit of nuclear weapons.

Q When the President talked with Allawi this morning, you said that
they talked about Iran possibly influencing the change of government.
Is there new information that Iran is trying to intervene or interfere
in the process?

MR. McCLELLAN: Well, leaders of the interim government in Iraq have
expressed concerns that Iran is trying to influence the shape of the
transitional government. We take those concerns very seriously. That's
why you're hearing not only us, but leaders in Iraq saying to Iran,
stop trying to influence internal politics in Iraq. It's for the Iraqi
people to decide who their leaders are. They elected their transitional
government; they were the ones who showed the determination and courage
to defy the terrorists and go to the polls in large numbers and elect
representatives to serve as they transition to democracy. And those
representatives are the ones that should be choosing the leadership of
that national assembly. And that's the message that we were sending --
this should be an Iraqi process.

Q Scott, can you be more specific on how they're trying to
influence?

MR. McCLELLAN: No. These are concerns that have been expressed by
the leaders in Iraq. You might want to ask them for some more details,
if they can share those with you. But we know that they are continuing
to meddle in Iraq's internal political process. And Iran made some
commitments not to do that; they made a commitment to play a
constructive role in helping the Iraqi people build a free and peaceful
and democratic future.

Q Scott, can you just elaborate on if, in fact, the administration
believes it's possible to verify that the Iranians are stopping their
enrichment and their uranium reprocessing plants, or if ultimately this
doesn't come down to an end game in which the U.S. is completely
against an atomic energy program in Tehran?

MR. McCLELLAN: Well, the Director General of the IAEA has said that
while they have provided some cooperation, they have not been fully
transparent and they have not been fully open about their activities.
And that's why we have skepticism, because for 20 years, as Director
General ElBaradei pointed out, they were operating a clandestine
program. They had obligations under the Non-Proliferation Treaty to
disclose this activity, and they failed to do that. So you can
understand our skepticism about Iran coming into full compliance and
abiding by its international obligations.

That's why we're working closely with our European friends to
develop a common strategy to get Iran to come clean and adhere to its
international obligations. And part of those international obligations
are to cooperate fully with the International Atomic Energy Agency, and
that's why I hit on -- one of the most important points is that they
need to permanently cease their reprocessing and enrichment activities.
That's the way for them to build confidence that they don't have an
intention -- that they don't have any intention of building a nuclear
weapon.

Q So if the IAEA were to get over these concerns and the EU were to
say -- EU-3 were to say that it is, in their minds, sufficiently
convincing that this is a peaceful civilian atomic energy plant, would
the administration then drop its concern?

MR. McCLELLAN: I don't think it's so much up to them.

It's up to Iran. The focus needs to be on Iran. This is a question,
will Iran change its behavior and come into compliance, and we'll see.
We have been skeptical in the past, for good reason, and we remain
skeptical today. But we want the efforts of the Europeans to succeed.
And we will see, by Iran's own behavior, whether or not they're going
to come into full compliance.

Q Can I follow up on the --

MR. McCLELLAN: Go ahead.

Q On a different topic, the President this morning mentioned Osama
bin Laden at the swearing-in of Michael Chertoff. Is there any
particular reason for that? Are there new developments on that front?

MR. McCLELLAN: Well, as you are aware, he cited some recent
intelligence that we had gathered relating to bin Laden and Zarqawi.
And what he was citing in his remarks today is that part of winning the
war on terrorism is continuing to go after the terrorist leaders. We
are dismantling the al Qaeda network. We have brought to justice, in
one way or another, some three-quarters of the leadership. Al Qaeda is
the sworn enemy of the United States. The President's number one
obligation is to the safety and security of the American people. And
bin Laden and al Qaeda were responsible for the September the 11th
attacks on American soil that lead to the killing of some 3,000
innocent Americans. We are determined to bring them to justice.

We are bringing much of the leadership to justice already. They
will be brought to justice, as well. Zarqawi is also a sworn enemy of
the United States, and an associate of al Qaeda, and we continue to
pursue both of them. We have brought to justice in Iraq -- either the
coalition forces or Iraqi forces -- a number of Zarqawi's top
lieutenants. We continue to pursue him, as well, working in partnership
with Iraqi security forces and he will be brought to justice. And
that's what the President was talking about in his remarks.

Q Is there anything specific, though, on Zarqawi, that led the
President to mention bin Laden and Zarqawi today?

MR. McCLELLAN: Anything specific?

Q Yes, is there anything in the works that prompted --

MR. McCLELLAN: Well, he continues to try to block the transition in
Iraq to democracy by carrying out attacks on innocent Iraqis. And we
are partnering closely with Iraqi security forces to go after his
network in Iraq, dismantle it, and bring him to justice. And we have
made important progress in capturing some of his key lieutenants.

Go ahead, Goyal.

Q I have two questions. One, a Saudi man is on trial at the U.S.
District Court in Alexandria who wanted to hurt the President. He had
connections with Osama bin Laden and al Qaeda. When President spoke
this morning about the terrorism threat is still there, welcoming the
new Home Secretary Mr. Chertoff, which many said is a good choice.
Question is that, do we still have, as President said, are we going to
raise the level of threat of terrorism that we face today? And where do
we stand as far as this man was -- wanted to hurt the President?

MR. McCLELLAN: Well, the terror alert is already up, as you're well
aware. There's no plans to change it this time, but it's something we
are always evaluating and looking at, based on intelligence we're
receiving. But just because the threat level may not be going up
doesn't mean we aren't taking additional measures to strengthen the
homeland from terrorist attacks. We have Homeland Security personnel
that is work -- that are working 24/7 to protect the American people.
Whether it's on our borders or at our ports or at our airports, those
men and women are serving on the front lines of defense against a
possible terrorist attack. And they're working around the clock.

And we're always looking at ways to harden our defenses and better
protect the critical infrastructure. You heard the President talk about
that in his remarks today. But the best way to win the war on terrorism
is to stay on the offensive and bring to justice those who seek to
inflict harm on the American people, like bin Laden and Zarqawi, and to
work with the international community to advance freedom and democracy
across the world, to help defeat the ideology of hatred that the
terrorists espouse.

Go ahead, Mark. Let me keep going and I'll try to come back if I
can.

Q Scott, back to Social Security. The President identified this as
a top priority as soon as he was elected. He had an economic conference
that Social Security was a centerpiece of, it was a centerpiece of the
State of the Union speech. He has been campaigning for a month. New
survey indications today that public support is declining for his idea
for private retirement accounts.

MR. McCLELLAN: It's interesting that you cited that survey, because
if you look at recent surveys, all those surveys show that the American
people recognize that Social Security is either in crisis or faces
serious problems. And that survey is included in that. The American
people are recognizing the problems facing Social Security. The first
step in our efforts to strengthen Social Security is --

Q What I was asking about is his principle, his core principle of
the personal retirement account seems to be going the other way. Why is
that?

MR. McCLELLAN: I disagree with you, Mark. We're making important
progress to act on Social Security this year. That's why -- that's what
I'm pointing out. The first step is to clearly define the problem
facing Social Security, so that the American people understand the
importance of acting on a solution now. And I think that you're seeing
in the surveys, the American people are understanding the serious
problems facing Social Security.

In his State of the Union address, the President spent a good
portion of that address highlighting the challenges facing Social
Security, and highlighting the fiscal problem at the heart of the
Social Security debate. And so this is an education period that we're
in right now, where we're reaching out to the American people, where
we're discussing it with members of Congress, and I think you're seeing
that important progress is being made there. As I pointed out to Terry,
you now have many more people recognizing that there are serious
problems and starting to talk about solutions. That's important
progress, but at this early stage in the game, I think it's too hard to
try to judge the outcome.

Q I'm not telling you to judge the outcome, I'm just trying to
figure out why it is that, if the numbers are to be taken as accurate
of the nation as a whole, Americans might be listening to him about the
depth of the problem, but not liking the solution he has in mind.

MR. McCLELLAN: No, Mark, this process has just gotten underway.
And, first of all, we don't -- leadership is not based on looking at
polls. Leadership is based on identifying problems, and then talking
about possible solutions, and reaching out to members of Congress to
get something done. And that's what this President is doing.

We're making important progress. You've heard from leaders like
Senator Frist and others who have said, there has been important
progress that they're encouraged by. And the fact that the American
people are recognizing the problems facing Social Security. If you look
at the areas where the President has gone and already campaigned on
this issue, I think you're seeing that people in those communities --
you're seeing growing support for the need to act on Social Security.

And we're going to be blanketing the country with administration
officials, White House officials, and the President himself, talking to
the American people in the coming weeks, and identifying the problems
facing Social Security. The President is confident about where we are
right now. This is very early in the process, and he is confident that
we're going to be able to find a solution this year to this problem.

Q Scott, two follow-ups to that, though. Does the President believe
he has as much as 60 days to keep this plan alive? And also, what is
the reaction to the Democrats who are starting their own road show in
an effort to just make sure that any legislation pretty much is
killed?

MR. McCLELLAN: What is the -- I'm sorry, what about the Democrats?

Q The Democrats are having their own road show; they're going to be
in New York City tomorrow, Philadelphia also. What is your reaction to
that?

MR. McCLELLAN: Well, first of all, if you're asking about people
just simply saying that they're opposed to doing anything, or trying to
divert attention away from the problems, I think the American people
are going to reject that approach. The American people clearly see
there are problems facing Social Security. And we want to make sure
that they better understand exactly what those problems are that face
Social Security. That's why we're in an all-out campaign to clearly
define what those problems are, and that's the period that we're in
right now. I haven't heard anybody put any time frame on it, but these
are stepped-up efforts on behalf of the administration as a whole to go
out and educate the American people about these problems.

Q He thinks that 60 days is enough of a time, or within 60 days --

MR. McCLELLAN: No, we're going to continue pushing forward --

Q Do you need more time, less time?

MR. McCLELLAN: We're going to continue pushing forward on this
important priority until we get it done. And we recognize that there's
a legislative process involved here. That's why the President is
reaching out to members of Congress on both sides of the aisle and
saying, I want to hear your ideas; I want to work together in a
bipartisan way to find a solution. This is a serious problem. We have
an obligation as the elected representatives of the American people to
work to solve these problems.

I would point out to you that this is an issue the President
campaigned on in 2000; it's an issue he campaigned on in 2004. And he
was reelected in a strong way by campaigning on this issue, in part.
And there are a number of members of Congress that campaigned on
strengthening Social Security, and the people in their districts
responded by either electing or reelecting them to their positions. I
think the American people have a growing understanding of the problems
that we face and the need to act now to address this problem.

Connie, go ahead.

Q Scott, one more on Iran. What enforcement mechanism does the U.S.
and the EU have if Iran doesn't comply? And do you still think that
some sort of appeasement would work; is that still on the table,
regarding the World Trade Organization?

MR. McCLELLAN: I wouldn't use that word at all. In fact, the
international community is sending a very clear message to Iran about
what Iran needs to do, and that is they need to fully comply with those
international obligations that I've cited before.

In terms of what -- tell me the first part of your question again
-- I'm sorry.

Q There are two options on the table, either the World Trade
Organization, or the military option.

MR. McCLELLAN: Oh, you mean the national security -- I mean, the
United Nations Security Council. And we have long -- and we just
expressed again the other day at the International Atomic Energy Agency
that Iran's noncompliance is grounds for referring the matter to the
United Nations Security Council. That's something we've believed for a
long time, because Iran has failed to come into full compliance.
Nothing short of full compliance and a complete abandonment of their
nuclear weapons ambitions is acceptable.

I think we've made that very clear. I think the international
community has made it very clear. We are speaking with a clear unity of
purpose. That's what came out of the meetings last week. You've seen
others step up at the meetings in Vienna to speak out against Iran's
failure to comply and failure to adhere to their international
obligations. And if they continue to fail to comply, then there are
steps that we can look at. And I think the international community
understands that, as well. No one wants to see Iran develop a nuclear
weapon.

Sarah, go ahead.

Q Thank you. Scott, Uruguay has a new President who bills himself
as a socialist. One of his first acts was to re-establish relations
with Cuba and Fidel Castro. President Vasquez vows to make Uruguay more
independent, with lesser ties to the United States. Does the President
view this as another warning sign that the U.S. is in trouble in much
of Latin America?

MR. McCLELLAN: First of all, this new democratically-elected
representative you're referring to, the President, reached out and
congratulated the new leader on being elected to this position, and we
look forward to working with him and others on our common priorities in
the hemisphere. I think our views are very well known when it comes to
Cuba, and our concerns are also very well known when it comes to places
like Venezuela.

Why don't we go to the back? Go ahead.

Q Quick question about the President's -- or the administration's
position on reopening the border to Canadian live cattle. Today we're
seeing the Senators on the floor of the Senate trying to scuttle with
the resolution, the USDA ruled, that would reopen the border to
Canadian live cattle. And of course, we had yesterday the court
decision in Montana that looks likely to postpone reopening. Can you
just clarify the administration -- the President's position on this?

MR. McCLELLAN: We are moving forward to reopen the border with
Canada. Secretary Johanns has been working on that effort, and as
you're aware, I think we put out a statement of administration policy
earlier today expressing our opposition to what is going through
Congress right now. And that's our view.

We believe that the rule that the Department of Agriculture is
moving forward on fully protects human health and fully protects animal
health. We've worked closely with Canadian officials on this issue for
some time now, and it's a product of a -- really a multiyear,
deliberative, transparent and science-based process. And failure to
reopen the border with Canada could have serious economic consequences,
as well, on the beef and cattle industry here. And disapproving the
rule would undermine our efforts to ensure that international trade
standards are based on science, and it would impede our efforts to
reopen foreign markets to U.S. beef. And so that's the concerns we
continue to make clear.

Q Can I just ask one more question about the meeting between
Vicente Fox, Paul Martin, and President Bush? Will there be any
bilaterals -- bilateral meetings between Martin and Bush, and will the
topic of missile defense come up?

MR. McCLELLAN: I think we're still finalizing the agenda and
working with those two countries. This is scheduled to be a trilateral
meeting and trilateral lunch. So I'm not sure that they will be
separate bilateral meetings. But we'll keep you posted as we get
closer. And whether or not other issues come up, you'll be there to
cover it and I'll be there to brief you on those issues, as well.

Q What about immigration reform at the Baylor Summit? Is that
something that would come up? Or would that wait until a later
meeting?

MR. McCLELLAN: Let's let them work out the agenda. I think one of
the things they'll obviously talk about are the borders. And I suspect
that this is an issue that -- well, this is an issue that is important
to, I know, President Bush, and I know it's important to President Fox,
as well. So I would suspect that they would certainly discuss it. But
let's let the agenda be --

Q Is it mainly on trade?

MR. McCLELLAN: Let's let the agenda be set. It's on what I
described. The broad picture is our security and economic prosperity
for all of North America. I mean, those -- security and prosperity go
hand-in-hand. If you look at what we've talked about in previous
summits or meetings in the hemisphere, that's at the top of our shared
agenda.

Q Do you expect that --

MR. McCLELLAN: But we have three weeks to go, so let's let the
agenda get set, and then we can discuss it closer in.

Q One more. Do you expect that the President would meet with
President Fox later on after this summit that was announced in Chile?
Remember, they were going to hold some kind of immigration forum?

MR. McCLELLAN: We will keep you posted if there are any additional
meetings to announce.

Go ahead.

Q You talked about the polls that show that Social Security has
punched through to the American public, in a sense, that there is an
agreement that there's a problem. But you're still not getting traction
on the solution, as we talked about. So what in this next 60-day
campaign are you going to do substantively differently to make people
believe that this is the right solution? And also, is it time to get
into the second inning -- to use your phraseology -- and propose how --

MR. McCLELLAN: He said it first.

Q Bottom of the first.

Q Quoting John Roberts -- to get into the second inning where
Congress is proposing legislation that the White House backs where
people can hear real details discussed?

MR. McCLELLAN: Congress is proposing legislation. You already have
some legislation out there. You have another -- Senator Hagel, I know,
is getting ready to propose some legislation, I think, as early as next
week. So people --

Q So this is the White House's legislation?

MR. McCLELLAN: No. That's what I -- that's what, if you heard what
I said at the beginning, we welcome all those who are expressing ways
to solve this problem. We've got to continue to define the problem.
That's the first stage of this national discussion, is to continue to
define the problem. So a lot of the time the President and the
administration is going to be focused on over the next few weeks, or
next several weeks, is clearly defining the problem facing Social
Security, because it affects all Americans. And we're also going to be
talking about some of the possible solutions.

Part of comprehensive reform is enabling younger workers to invest
in personal accounts. That's part of the solution. The President has
said -- and, in fact, he cited in his State of the Union address -- a
number of other ideas that he said, all these ideas are on the table
for discussion. He welcomes a discussion of possible solutions. We're
still in the phase of discussing ways to solve the problem. The
President has laid out clear principles and some ideas to build upon.
But we have not endorsed a specific plan at this point. We want a plan
that will make it permanently solvent and that will help younger
workers realize a greater rate of return on their own retirement
savings.

Q Well, you're talking that people get that there's a problem,
they're just not getting to the agreement on any kind of solution. So
what do you do differently to get to a solution?

MR. McCLELLAN: As I just said, we're still in the phase of clearly
defining the problem. And what we do is we continue what we're doing
now. We're reaching out to members of Congress; we're having
staff-level meetings; the President is having meetings. We've only had
a chance to have a handful of meetings, or the President has, at this
point in the current Congress. So he's going to have -- continue to
have many more meetings. We're having educational discussions with
members of Congress with some of our policy experts to talk about the
issues and the problems facing Social Security. Those will continue so
that everybody has a common understanding of the facts and the
problems, so that we can move forward together to find a solution.

So that's what we're doing right now. We're continuing to reach out
to Congress and say, here are some ideas. We're also listening to their
ideas and saying, let's work on this together.

Go ahead in the back. Go ahead.

Q Scott, the President -- in terms of the Iran situation, the
European attitude is that they want to offer a package to the Iranians
which would get them to back away from the reprocessing and enrichment,
which they, according to the NPT, would have the ability to do, as
signatures of the NPT. So they want to offer them some carrots. The
question is, they cannot do it if the U.S. is not prepared to go along
with it. And I'd like to ask, what is the U.S. prepared to do with
regard to Iran if the Europeans, indeed, do come up with an agreement?
What would the U.S. be prepared to go along with in terms of economic
concessions, WTO membership --

MR. McCLELLAN: First of all, the Europeans have been meeting with
Iranian officials. They're pursuing a diplomatic course to resolve this
matter. It depends on Iran. Iran is the one that has to change their
behavior. That's where the focus needs to remain, and that's where the
focus is. It's where the focus is of the international community. All
of us are working toward that common purpose.

Now, the President had some very good discussions last week with
leaders from the three countries, and other leaders, for that matter,
that are concerned about the problem. They had some good discussions.
They talked about some ideas for moving forward together on a common
strategy. We want to do everything we can to support the efforts of the
Europeans so that that diplomatic effort will succeed and Iran will
finally come clean and abide by its international obligations.

That's what we're working toward. We're continuing to have discussions
with our European friends. I expect we'll have more to say soon.

Go ahead.

Q -- National Security Council said today that we are preparing our
nations to accept the sanction by the U.N. Security Council, if any.
What do you --

MR. McCLELLAN: I'm sorry, what -- which nation?

Q Security -- National Security -- the Secretary of National Security
of Iran said today --

MR. McCLELLAN: Iran? Okay.

Q -- yes, that we are preparing our nation to accept any kind of
sanction by the U.N. Security Council, if any. What do you think you're
going to have with your European allies, with the new approach by the
Islamic Republic of Iran?

MR. McCLELLAN: I think what Iran needs to do is come clean and abide
by its international obligations. That's the message that they need to
hear and that's the message they are hearing from the international
community. We also have other concerns about Iran's behavior. We talked
about one of those concerns when it comes to their interference in
Iraq's political process. We have concerns about their human rights
record. We have concerns about their treatment of their own people and
their refusal to hear the voices of their own people who seek greater
freedoms. We are going to continue to talk about those concerns.

Iran needs to focus on how to change their behavior and realize better
relations with the international community, but to do that, they have
to change their behavior, and they have to come clean when it comes to
their nuclear program.

Q Scott.

MR. McCLELLAN: John.

Q At least -- let me ask you about bin Laden. At least two years go
by, the President doesn't mention the word "bin Laden" unless asked
about it. Suddenly this morning, a couple of days after this
intercepted communication, he's all over it. It's tantalizingly
suggestive of the idea that you got something out of that
communication.

MR. McCLELLAN: I beg to differ with your characterization that two
years have gone by since he's mentioned -- it's not the case, John.
First of all, he commented on -- back in November, I believe it was,
maybe it was late October -- he was commenting on the tape that came
out, of bin Laden, at that point, and he's spoken out about the
importance of continuing to go after those who seek to inflict harm on
the American people in the civilized world, and bin Laden is one of
those individuals. We continue to pursue all the al Qaeda leaders and
all those who seek to do harm to the American people. That's the
President's responsibility.

Q But what about to the substance of what I asked for? It's
tantalizingly suggestive of the idea that you got something out of this
communication. It's put this back on the front burner again.

MR. McCLELLAN: Well, I think we talked about the communication the
other day. Homeland Security officials talked about how we shared this
information with state Homeland Security advisors so that they would
have that information before them. But it was -- while it was credible
information, it wasn't specific information. So we've spoken to that
issue already.

Q Thank you.

MR. McCLELLAN: Thanks.

Q Scott, one more question about Porter Goss's suggestion that he's
got five hats and it's a lot of work for one person, a mere mortal, to
run the CIA, et cetera, et cetera. Can you just give us a quick
assessment as to what the process of reform in changing the culture in
the intelligence community is, in the White House's view?

MR. McCLELLAN: Well, first of all, I think -- my understanding of
what Director Goss was referring to is that's all the reason why we
need a Director of National Intelligence. We have already implemented a
number of reforms to strengthen our intelligence capabilities and to
improve the sharing of intelligence. We want to make sure that we have
a unified intelligence community that is fighting together as one team.
And we've taken a lot of steps since September 11th to make that
happen.

Intelligence is our first line of defense in the war on terrorism.
We are up against a shadowy network of terrorists who want to inflict
harm on innocent civilians on a large-scale basis. And that's why it's
critical that we have a unified intelligence structure to defeat the
terrorists and to win the war on terrorism. And the Central
Intelligence Agency plays a vital role in protecting the American
people and helping us to win the war on terrorism, and they will
continue to do so.

We're continuing to implement the reforms that were passed in the
legislation. The President had already started on moving ahead on the
National Counterterrorist Threat Center, and that's an important part
of the reforms. But all of us have a unity of purpose here, and that is
protecting the American people. And so we're going to work together to
make sure these reforms are implemented in a way that helps us best
achieve those objectives, and make sure that we're getting the best
possible intelligence.